The Department for Business and Trade has published its annual Investing in Women Code [0] which finds that venture capital fund managers who have signed up to the Code are more likely to invest in female founders.

32% of all venture capital deals made by Investing in Women Code signatories were in female-founded companies last year, compared to the market average of 28%, revealed in the latest report published today. This is the fourth year in a row that Investing in Women Code signatories have outperformed the wider market.

The report also shows that Investing in Women Code signatories who consistently report data year-on-year perform better in deals to teams with all-female founders than those who do not. However, there is still a long way to go, with the average amount of angel investment in all-female teams 50% lower than the amount invested in mixed gender teams and all male teams

The Investing in Women Code was founded in 2019 as a landmark government-led initiative in response to the Rose Review's findings that a lack of funding was one of the most significant barriers to women seeking to effectively scale a business. Investing in Women Code Partners include the British Business Bank, British Private Equity & Venture Capital Association (BVCA), UK Business Angels Association (UKBAA), UK Finance, and Responsible Finance. Code Partners are responsible for managing data collection and reporting, on behalf of government.

Over 250 organisations have now signed up to the Code, showing the growing numbers of lenders and investors committed to increasing the levels of finance directed towards women-led businesses. Today's report shows that IWC signatories are leading the way in addressing the finance gap between male and female entrepreneurs. Equal access to finance will boost the potential of female founded businesses and deliver on this Government's priority to grow the economy.

Other key findings from the Investing in Women Code's fourth annual report show that:

• The market share of signatories' deals continues to rise for the third year in a row, as the number of signatories increases.
• The 30 new venture capital signatories reporting for the first time in 2023 invest a higher share of deals to teams with at least one female founder compared to all signatories and the wider market, with 42% of deals going to teams with at least one female founder compared to 28% in the wider market. 
• 32% of all venture capital deals made by Investing in Women Code signatories were in female-founded companies last year.
• There has been a rise in the number of pitch decks and funding requested to angel groups from all-female teams.
• Warm introductions continue to be the most successful in securing funding for all teams.
• Angel groups with more than 15% women investors made 57% of their investments in teams with women founders.
• Diversity within signatories' investment committees improves outcomes for teams with at least one female founder.
• There is an increasing number of female angel investors in the UK. With three angel signatories consisting entirely of women angel investors, triple the number of last year's cohort.

The findings demonstrate that although Code signatories are leading the way, there is still much work to be done to close the gender investment gap, with considerable strains on the market having the highest impact on all female founding teams.

Code Partners are optimistic that expanding the Investing in Women Code to recruit more Limited Partners and CDFIs will have substantial impact across the finance ecosystem.

Increased engagement with signatories will provide support to those who are still at the beginning of their journey, and recognise those who already lead the way. In partnership with the Invest in Women Taskforce, the Code will work unitedly towards its mission to ensure talented and ambitious women entrepreneurs can access the finance they need to thrive.

Jenny Tooth OBE, Executive Chair of the UK Business Angels Association, said:

"With an increasing number of our Angel groups signing up to the Code, including a growing number of groups with a strong proportion of women angels, we can see the impact on women founders seeking and finding angel investment across the UK. Signatories are attracting increased level of women founders into their pipeline, whilst, for the first time, deals in women founders have surpassed the number of deals in male founders accessing investment, achieving over half the deals and share of investment from the Angel group signatories.

The results from signing the code are clear to see, but we have much more to do to enable all women teams to access their full share of investment. We will be working to ensure that many more of our Angel groups identify the benefits of being part of the Investing in Women Code community in the year ahead."

Louis Taylor, Chief Executive Officer, British Business Bank, said:

"The British Business Bank was a founding signatory of the Investing in Women Code and unlocking potential is an important strategic priority for us. The Code has a tangible impact and is driving change in the way capital is allocated to women-led businesses. After four years, the data still shows that a higher percentage of venture capital deals made by Investing in Women Code signatories feature at least one female founder, compared to the wider market.

While some progress has been made across the venture capital sector to improve access to finance for female founders, there is still a huge amount more to do, which we can only achieve by working together to promote greater equity and inclusion to back innovation and economic growth across the UK."

David Raw, Managing Director, Commercial Finance, UK Finance, said:

"Supporting access to finance for female entrepreneurs is a vital part of achieving the UK's economic growth goals. Our members offer a range of exciting programmes and initiatives to service the diverse community of women led businesses in the UK, including accelerator programmes, mentoring, investment readiness sessions and peer networking.

UK Finance is proud to be a delivery partner of the growing Investing in Women Code, alongside many of our members signatories. While the data is showing reassuring signs of improvement, there is still lots more to do. UK Finance and our members will continue to collaborate and support the Investing in Women Code and the Invest in Women Taskforce and its accompanying Ecosystem Working Group in order to drive forward this important agenda."

Theodora Hadjimichael, Chief Executive Responsible Finance, said:

"Community Development Finance Institutions (CDFIs) dismantle barriers in access to finance. Over 40% of CDFI lending is to women-led businesses because our sector designs products and services to help us say ‘yes' to female founders.

Many CDFIs are longstanding signatories to the Investing in Women Code. We wholeheartedly welcome the extension of the code and are delighted to be Code Partner for CDFIs. For the financial services sector to meaningfully address women entrepreneurs' access to tools, resources and finance, we must work together."

Michael Moore, Chief Executive, BVCA, said:

"We are pleased to see the continued progress reflected in this year's report, with Investing in Women Code signatories consistently backing female founders at higher rates than the wider market. As the BVCA expands its role as Code partner, and is leading on the data collection for Limited Partners, we recognise the vital role LPs play in driving change across the ecosystem.

Maintaining this momentum is crucial, and it's encouraging to see the new government prioritising support for initiatives that foster greater diversity and inclusivity in investment. However, the data reminds us that there is still much to be done. Our commitment, alongside our partners, is to ensure that female founders have equal access to the capital they need to thrive, and we remain dedicated to closing the funding gap that persists between male and female-led businesses."

The Fourth Annual Report can be found online here [1]